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Thursday, 29 June 2017

29 June 2017 - Views & News

MARKET INSIGHT

Markets are likely to open flat to positive. However, yesterday Nifty has broken 9500 on closing basis which indicates that short term trend has turned down. Key level on the downside will be 9200. Any attempt of minor degree bounce is likely to face resistance near 9560- 9600 with major hurdle at 9700.

Nifty Spot Levels

Support 9450 – 9341 – 9280
Resistance  9560 – 9617 - 9709

GLOBAL MARKET

US stocks ended higher after Wall Street propelled by financial and technology stocks led a broad market rebound. The benchmark S&P 500 index scoring its biggest one-day percentage gain in about two months.
The Dow Jones Industrial Average rose 143.95 points, or 0.68 percent, to 21,454.61

MARKET UPDATE

Sgx Nifty +37 pts Dow +143.95 pts ,Nsdq +87.79 pts , S&P +21.31 pts‎, Bovespa +342 pts , Ftse -46 pts , Dax -23 pts , Cac -5 pts , Nikkei +85 pts now , Crude @ $44.80 brl (+0.06), Brent @ $47.68 brl (+0.01) , Gold @ 1250.57 (+1.47), Silver @ $16.778 (+0.05), Euro @ $1.1384, JPY @ $112.3800, INR @ $64.522

Today's Corporate Action 29th June  Ex Date

CENTUM Final Dividend - Rs. - 3.0000
EASTRED Final Dividend - Rs. - 0.5000
GULPOLY Final Dividend - Rs. - 0.3000
HDFCBANK Dividend - Rs. - 11.0000
NUCLEUS Buy Back of Shares 
NUCLEUS Final Dividend - Rs. - 5.0000
SKPSEC Buy Back of Shares 
STRTECH Final Dividend - Rs. - 0.7500

TOP NEWS

Amtek Auto: Along with private equity funds, Bharat Forge and Sona Koyo Steering are in race to acquire strategic stake in Amtek Auto from Banks – Sentimentally positive for Amtek Auto which is among the first few troubled accounts to go thru the Insolvency proceeding leading to change in promoters/strategic investors; in case of Bharat Forge and Sona Koyo a lot would depend on valuations of the stake and the control that can be exercised over Amtek assets (we do not advise rushing to Buy these stocks).

Ashok Leyland sees short-term blips in MHCV sales due to GST transition; Negative read thru for MHCV players (Ashok Leyland, Tata Motors, Eicher motors).
Ashok Leyland expects short-term moderation in medium and heavy commercial vehicle (M&HCV) sales due to the impact of GST transition. The fleet operators are expected to  defer their purchases owing to uncertainty around GST. Also the manufacturers would align their production and inventory as per GST requirements. Ashok Leyland MHCV sales have already declined 30% for April and May 2017 and we expect June 2017 sales to remain in the declining trend . Negative.

RCF: The Government of India has announced to sell a 5% stake (2.75 crore equity shares) in RCF through the OFS (offer for sale) route. The floor price for the same has been fixed at Rs 74.25 per share (which is at 7% discount to last closing price) . Further company is offering a discount of 5% ( to the cut off Price) to retail investors with 20% of the shares on sale reserved for retail category. The share sale would be done on 29-30 June 2017 through a separate window on the stock exchange. Stock to remain in focus.

Mindtree Board approves Rs 270 crore buyback plan, at Rs625 (17.7% higher than last closing price) – stock to be in focus
Mindtree will buy back up to 43.2 lakh shares, comprising 2.5% of the total paid up equity share capital at a price of up to Rs 625 per equity share, which is 17.7% higher than last closing price. The buyback program have neutral impact on earnings, though will increase the payout ratio for the year. Promoters have option to participate in the buyback program.

Aurobindo Pharma gets US FDA nod for Norethindrone Acetate oral tablets, stock to be in focus

Godrej Industries to raise Rs400cr through Godrej Agrovet through public offer; the other key details are awaited – value unlocking in agrovet; positive read through for Godrej Industries 

Fortis Healthcare Gets Shareholders' Nod To Hike FII Holding Limit To 74% Of Paid-up equity capital – positive read through for the stock

OTHER NEWS

 TVS Motors ties up with Abans Auto to launch 3-wheeler in Sri Lanka; positive

TVS Motor Company announced a partnership with Abans Auto, a leading distributor in Sri Lanka, to launch its 200 cc passenger three-wheeler TVS King in the island nation. The TVS King will be priced at 6,91,850 Lankan Rupee and will be retailed across Abans Auto’s over 200 showrooms and appointed dealers in strategic locations in Sri Lanka. Furthermore, Abans Finance will provide finance schemes to the customers of TVS Motor Company at affordable rates in order to facilitate sales. Positive

Bajaj Auto launches Pulsar NS160 to strengthen presence in premium motorcycle space; positive read thru
Bajaj Auto has launched the Pulsar NS160 motorcycle in dealerships at a price of Rs 1.18 lakh, on road- Mumbai. According to the Executive Bajaj dealership in Mumbai, the company has started delivering the motorcycle to the dealerships. The motorcycle is powered by a 160.3cc, single-cylinder, oil cooled, four-stroke engine that churns out 15.2 hp of power and 14.6 Nm of torque mated to a 5-speed gearbox. The suspension setup comprises of telescopic forks at front and a monoshock unit at the rear. The motorcycle gets disc brake at front and drum brake at the rear

Reliance Industries Limited’s (RIL) KG basin block production may decline as three of its producing wells are close to end of their production cycle as per the media reports. RIL is also working on extending the life cycle of the wells until the production can be replaced by new wells – marginally negative for RIL. 

Government of India will start first auction under open acreage licensing program from 01-July-2017 and the auction will be held twice a year (i.e. next auction is likely to be in December-2017) as per the media reports – sentimentally positive for upstream companies especially ONGC and Oil India.

Wipro: Locals form over 50% of workforce in U.S.
Over the past six months, the company hired over 1,600 employees by attracting and nurturing local talent to drive innovation and help transform clients’ businesses into digital enterprises. Wipro stated that locals now form over 50% of its workforce in the United States. During FY17, 3,000+ locals joined the company and currently it has a workforce of over 14,000 in the USA.

Tata Motors-Volkswagen partnership for platform sharing likely to be called off; Negative read thru for Tata Motors
Within just over three months of signing a co-development agreement, the partnership between Tata Motors and Volkswagen Group has run into rough weather, with differences over the use of platform and doubts related to business viability. In March this year, Tata Motors, Volkswagen Group and Skoda had announced an alliance for the joint development of products with the first roll-out expected in 2019. The two companies were exploring using Tata Motors' AMP(Advanced Modular Platform) with VW technology, especially electronics, for products meant for emerging markets in order to gain a significant cost advantage over VW's MQB-A platform. However, the proposal has turned out to be expensive and there is a realisation that the business  proposition of such a collaboration is not as attractive as it was assumed earlier.

Car makers enhance discounts as GST rollout nears; negative read thru for car players Maruti and M&M
Cash discounts on a host of cars are now higher in the countdown to the goods and services tax (GST) with dealers looking to offload as much inventory as possible ahead of July 1, 2017. Although input tax credit is available on transition inventory, trade channels are unclear on the processes for claiming these benefits and are liquidating stocks. Discounts on Maruti Alto which were running at close to Rs 30,000, are now higher at Rs 35,000-40,000. The Maruti Swift can now be had at a price that is 25,000 less than at the start of the month, while the WagonR is now cheaper by Rs 30,000-32,000. Discounts on a Mahindra Scorpio have been raised to 35,000-37,000 during the last week from Rs 30,000 at the end of last month. Dealers are also trimming prices for products like the XUV 500, which will become significantly cheaper post-GST.

Aviation Sector: The cabinet gave in-principle approval for divestment of Air India. A group of ministers will now look into the quantum, mechanism, debt and other issues of divestment. Aviation stocks Interglobe aviation, spicejet, jet airways (India) to remain in focus.

MORE NEWS

Banks to lobby RBI to go easy on provisioning
Daiichi moves NCLT to block Fortis demerger
Local companies, global PEs in race for Amtek
Printing of Rs 200 currency notes begins
FinMin starts notifying provisions of GST acts, amends rules
Govt bites bullet on AI, gives nod for stake sale 
Govt stitches rescue plan for Tata, Adani power plants
TCS reclaims most valued company status; RIL slips
Petya ransomware attack: JNPT, other Indian firms affected
Sebi proposes to ease foreign investors' compliance burden
Interest pushes up telcos' auction payout to Rs 3 lakh cr in 10 yrs
RBI panel to review Rs 10,000-cr debt soon
Sebi tweaks OFS norms to encourage employees' participation
Commodity markets turn bearish as prices fall
Discoms sitting on Rs. 2,000-cr dues to wind energy players
Govt launches Open Acreage Licensing; eases oil, gas exploration regime 
RIL refinances $2.3 bn loans to cut interest cost
CBI takes over Rs. 500 cr online ponzi scam probe
Everstone bakes plan to grab a slice of North Indian market
Ind-Ra notes low coal stocks at power plants 
Aadhaar-PAN linking mandatory from 1 July, govt notifies rules
 Anil Ambani’s summer asset sale expands, foreign banks approach NCLT on RCom
 AU Small Finance Bank IPO subscribed 18% on Day 1
Blackstone exits Jagran Prakashan holding firm, sells stake to promoters
ADB issues Rs14 billion rupee-linked bonds
India needs own path to implement global banking norms: Y V Reddy
EPF wage ceiling: Finance Ministry yet to decide on hike to Rs 25,000 per month
China economy improves in Q2 but deleveraging poses risks: Survey
Reliance Jio files 54 global patents in FY17, reveals Reliance Industries
Nifty cracks below 9,500, down 20 points
RBI on alert as foreign stake in AU nears 49%
India's largest container port disrupted by global cyber attack
Rupee edges lower by 2 paise to 64.55 a dollar
Assess demand first to make CIL’s $1 billion investment plan work

STOCK IN NEWS

Govt will divest 5% stake in RCF with floor price set at Rs 74.25 per share
Oil ministry is working on developing Gas Trading Hub
Godrej Industries to sell 400cr worth of shares in Godrej Agrovet IPO
• L&T: Westinghouse to resume designing on $20bn N-Plants
• Amtek auto - Bharat Forge, Sona koyo, blackstone in race to buy all or parts of group co’s
• Fortis Healthcare gets shareholders' nod to hike FII holding limit to 74% of paid-up Eq Capital
• US says to reopen H1B Visa premium processing 'As work loads Permit'
HPCL to raise 500mn$ through dollar bonds
• With the arrival of the monsoon season, major domestic airlines have announced special fares starting as low as Rs 699.
• Private sector lender Axis Bank has raised Rs 3,500 crore by issuing debt securities on a private placement basis. 
• Mindtree approves buyback up to Rs 270 Cr for 43.2 lakh shares at maximum Rs 625 per share

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